Government consults on regulating use of confidentiality provisions in employment contracts and settlement agreements

3 mins

Posted on 07 Mar 2019

The government has launched a consultation on measures to prevent the misuse of confidentiality clauses in cases of workplace harassment and discrimination.  

The consultation follows the Women and Equalities Committee’s report calling for better regulation of confidentiality clauses in the context of working relationships.The government shares concerns that confidentiality clauses are being used to intimidate or silence victims of harassment or discrimination. 

What limitations are the government proposing on confidentiality clauses?

The government proposes to legislate to make it clear that a confidentiality clause cannot prevent disclosure of information to the police. It asks whether disclosures to any other people or organisations should be similarly protected (but is wary of making this list too broad) and whether any other limitations should be placed on confidentiality clauses (whether in employment contracts or settlement agreements).

How will they ensure the limitations are clear?

The government disagrees with the Committee’s recommendation that it should set standard, approved wording for confidentiality clauses. Instead, it believes that confidentiality clauses should be required to set out clearly their limitations (for example, that the employee can still blow the whistle, report a criminal offence and disclose information to a court). In the case of confidentiality provisions during employment, it considers it would be simplest for the confidentiality obligations and limitations to be summarised in the written statement of employment particulars. 

The government also believes that the independent advice that an employee must receive in order for a settlement agreement to be binding should be extended, so that it must specifically cover the nature and limitations of the confidentiality clause and the disclosures that the worker is still able to make.   

How will these new recommendations be enforced?

The government proposes that a confidentiality provision in a settlement agreement that does not comply with the new requirements should be void in its entirety. It disagrees with the Committee’s suggestions that it should be a criminal offence to propose a confidentiality provision designed to prevent whistleblowing or the disclosure of a criminal offence.

The government is not proposing that non-compliant confidentiality provisions in the employment contract should be void in their entirety. Instead, it proposes that the employee should rely on the existing enforcement mechanism for breach of the obligation to provide a written statement of employment particulars. This enables an employee to obtain a declaration of their employment particulars and if they succeed in another tribunal claim brought at the same time, additional compensation of two or four weeks’ capped pay. 

The consultation Confidentiality clauses on measures to prevent misuse in situations of workplace harassment or discrimination closes on 29 April 2019.  

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